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SBI share price falls as RBI imposes Rs 2 crore penalty

The state-run lender was also asked to explain the payment of remuneration to its employees in the form of commission.

March 17, 2021 / 09:30 AM IST
SBI was asked to explain the payment of remuneration to its employees in the form of commission.

SBI was asked to explain the payment of remuneration to its employees in the form of commission.

 
 
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State Bank of India (SBI) shares fell a percent in the early trade on March 17 after the Reserve Bank of India (RBI) had slapped a penalty of Rs 2 crore on the largest public sector lender.

"The Reserve Bank of India (RBI) has slapped a penalty of Rs 2 crore on the State Bank of India (SBI) over "deficiencies in regulatory compliance," an official statement said on March 16.

The monetary penalty was imposed on the SBI through an order issued by the central bank on March 15.

"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the RBI said in a press release.

The state-run lender was also asked to explain the payment of remuneration to its employees in the form of commission.

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The SBI was penalised for "contravention of provisions of section 10 (1) (b) (ii) of the Banking Regulation Act, 1949 (the Act) and specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission," the statement added.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46 (4) (i) and 51 (1) of the Act," it further said.

"The bank has been awarded the mandate for the first SOFR (Secured Overnight Financing Rate) linked ECB deal by Indian Oil Corporation Limited (IOCL). SOFR is an identified replacement for USD LIBOR which is expected to be phased out at the end of 2021," the public lender said in another press release.

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At 09:20 hrs, SBI was quoting at Rs 377.30, down Rs 1.15, or 0.30 percent on the BSE.

The share touched its 52-week high Rs 426.45 and 52-week low Rs 149.55 on 18 February, 2021 and 22 May, 2020, respectively.

Currently, it is trading 11.53 percent below its 52-week high and 152.29 percent above its 52-week low.
Moneycontrol News
first published: Mar 17, 2021 09:30 am

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